A recent Appellate Division decision highlights the risks faced by commercial landlords who do not retain proper counsel to protect their interests. In Jung v. Fred’s Bagels LLC, the Appellate Division affirmed the trial court’s dismissal of a landlord’s complaint for possession of leased commercial space.
Plaintiff landlord leased space to defendant for operation of a bagel shop. Plaintiff sued to recover possession of the premises for non-payment of rent. At trial, plaintiff testified on his behalf regarding defendant’s alleged arrearage. The judge found plaintiff’s testimony to be “uncertain, equivocal, and[,] at times[,] dubious,” noting the number of times the alleged amount defendant owed changed. Further, plaintiff did not substantiate his testimony with any documentary evidence supporting the alleged amount in arrears. Defendant, on the other hand, provided documentary evidence of rent payments and costs defendant had incurred for various building repairs and expenses, which was accepted by the court into evidence. The trial court deemed defendant justified in deducting the costs from its rent, noting repairs referenced by defendant were structural “repairs that normally would be borne by the landlord, absent an agreement to the contrary.” Considering the testimony and evidence, the trial court found that defendant had established the defense of payment of rent and dismissed plaintiff’s complaint.
The Appellate Division affirmed the trial court’s ruling. Citing to Marini v. Ireland, 56 N.J. 130, 146 (1970), the appellate panel agreed that where a landlord fails to make repairs that would normally be the landlord’s responsibility, the tenant may make the repairs and deduct the costs from its rent. Notably, the court declined to hear plaintiff’s argument that the relevant repairs were defendant’s responsibility under the terms of the parties’ lease agreement because the issue was not properly raised before the trial court.
The trial court’s decision and subsequent Appellate Division opinion in this case underscore the importance of properly preparing your commercial eviction case. Despite being in the special civil part, landlord-tenant actions are nonetheless legal proceedings that can culminate in a trial. Should the matter be tried, it is crucial to lay out your case as meticulously as possible to secure a ruling in your favor. Testimony and documentary evidence are essential to a successful commercial eviction trial with a competent witness with personal knowledge of the facts and file. For instance, in this action, an account ledger could have been submitted by the landlord to corroborate the alleged amount in arrears.
In addition, proper opposition to tenant arguments is necessary. Here, landlord failed to argue that the alleged repairs made by defendants were the defendant’s responsibility under the lease agreement and therefore not subject to deduction from the rental amount. This pivotal mistake left the appeals court to not even considering landlord’s arguments regarding the rent deduction as it was not raised before the trial court.
This case is an excellent example of why it is in the best interest of commercial landlords to have their cases, no matter the size, properly presented before a court to ensure the best possible results. Failure to do so can result in loss of time, money and resources on top of an adverse result that does not achieve your goals. An attorney with expertise in commercial real estate can help craft a litigation plan that will increase a landlord’s chance of obtaining the relief they seek. Stark & Stark’s Shopping Center and Retail Development Group regularly represents owners, developers, and/or landlords in the commercial eviction process in New York, New Jersey and Pennsylvania. For more information on how Stark & Stark’s Shopping Center Group can assist you, don’t hesitate to contact Francisco Guzman at (609) 895-7296 or fguzman@stark-stark.com, or Thomas Onder, Shareholder, at (609) 219-7458 or tonder@stark-stark.com. Francisco, Tom and many other members of the Group are active members of ICSC.